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Question
The income statement disclosed the following items for the current year:
| Depreciation expense | $ 36,000 |
| Gain on disposal of equipment | 21,000 |
| Net income | 317,500 |
Balances of the noncash current asset and current liability accounts changed between December 31, last year, and December 31, this year, as follows:
| Increase in accounts receivable | $5,600 |
| Decrease in inventory | 3,200 |
| Decrease in prepaid insurance | 1,200 |
| Decrease in accounts payable | 3,800 |
| Increase in income taxes payable | 1,200 |
| Increase in dividends payable | 850 |
Prepare the operating activities section of the statement of cash flows using the indirect method.
Answer
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